- Optimism (OP) tokenomics review
- The market pauses amongst macro worries
- China to airdrop CDBC
Good Morning Banter fam,
Congratulations if you participated in the OP token airdrop today. Despite some congestion setbacks, the OPtimism network appears to be back on track.
If you’re not up to speed, we got you: Everything you need to know about the claim.
For those who didn’t participate and feel the online FOMO, there are details worth knowing before investing. For starters, the tokenomics.
Before investing in any token/project, I recommend reading the project’s whitepaper to understand the supply/demand structure of its tokenomics and to get an idea of the team’s philosophies and goals.
That being said, let’s dive into the nitty-gritty of OP’s tokenomics.
Current Price: $1.84 (CoinGecko)
Total Supply at launch: 4.3B
Inflation: 2% / yearly
Initial unlock: 1.3B
- Airdrop 1: (215M)
- OP Stimpack 0: (36M)
- OP Stimpack 1: (195M)
- RetroPGF: (859M)
Estimated Circulating supply after Airdrop 1: 251M (5.85%)
Estimated Fully Diluted Value: 7.9B
Total Value Locked: $541m
Token Release Schedule:
Source: Delphi Digital
There’s a lot to like about OP tokenomics:
- Unlike many recent token releases, OP had no venture capital rounds, meaning no entities purchasing tokens pennies on the dollar.
- Low inflation 2%/Year. Compare this to other major chains. (AVAX ~6%, SOL 6.94%, ETH 4.08%)
- Gradual unlocks. No significant cliffs (Chart above)
- Airdrops (OP token releases) awarded to network participants/protocols
- Only 5.85% of OP tokens are in circulation. The low percentage of tokens on the market will translate into high price volatility, especially if the market begins to FOMO early on.
- The basic tokenomics of OP are “A grade” compared to competitors. Not including early VC token selling rounds will eliminate large amounts of sell pressure in the future.
- One concerning aspect is the high fully diluted valuation (FDV) of 7.9B at current prices. In comparison, the NEAR Protocol (NEAR) has an FDV of 5.7B and nearly identical Total Value Locked. ($526m vs. $541m).
- Although gradually released, the token supply will grow from 30% to 100% in 4 years. That’s roughly 17.5% inflation annually, but a large portion of that supply will likely never hit the exchanges. Nevertheless, the token has much upside potential if early demand can meet the release schedule through an incentives structure produced by its ecosystem.
Please remember that this is an introductory study into tokenomics and not a recommendation to purchase any tokens. We always recommend DOING YOUR OWN RESEARCH and talking to a financial advisor when in doubt.
Market update 🌍
The broader crypto markets released the gas pedal today after substantial Memorial Day run-ups. Bitcoin (BTC) managed to stay positive for the day despite a volatile US session that saw it reach a low of $31.2k. BTC completed the day up 0.21% to $31.8k.
The RSI continues to trend upward, but the Stochastic RSI may be pointing toward a correction in the short term.
Source: Trading View
One of the better performers in the cryptoverse comes from Cardano (ADA) this past week. With current revolving narratives around sustainability, investors may be taking a second look at the slow-evolving chain. The ADA token increased 35% over three days while it broke through a long-lasting downtrend. Healthy amounts of volume backed the move. Whether or not ADA can reach the next major resistance of $0.75 will depend on overall market conditions. ADA completed the US session up 9.91% to $0.62.
Source: Trading View
|US markets close||Gain|
|Protocol (Coin)||Price ($)||Gain (%)|
|Oasis Network (ROSE)||0.07||+9|
|Celsius Network (CEL)||0.32||+9|
|Origin Protocol (OGN)||0.33||+24|
|Keep Network (KEEP)||0.27||+20|
|Bitcoin Fear and Greed Index||17 Extreme Fear|
|“Crypto” Google Trends 90d||23|
|“Bitcoin” Google Trends 90d||29|
Bumpy Start for OP token. The Optimism blockchain experienced a few setbacks after high traffic stopped the OP launch in its tracks. The blockchain’s mainnet and remote procedure calls (RPCs) began experiencing delays, but the network regained traction after a few hours. The team commented on the issues via Twitter and plans to drop a retrospective analysis next week.
China to airdrop $4.5m in e-CNY CBDC. The Chinese government will reportedly release 30 million e-CNY yuan to residents of Shenzhen in a new form of stimulus. The digital currency will be distributed in a “lottery process” where residents can then spend the currency at 15,000 shops (online and offline) that can process the new transactions. Additionally, the government has introduced several pilot programs to advance the adoption of the digital currency. Plans include international transactions.
- The Central Bank of Russia does not oppose using crypto in international transactions but the domestic financial system.
- Morgan Stanly says crypto VC will begin to slow by 50%.
At the protocol level
NFT & metaverse update 🐵
Most of us remember the great bull run of 2020-2021. It feels like yesterday when random shit-coins would run 200-300%, “just because.” It was easy to make gains, and everyone believed they had found an “edge.”
And then came the bear market of 2022. Reality hit.
Every cryptocurrency went down in price. But the bear market really beat down projects with high inflations, poor fundamentals, and no revenue streams. In other words, it separated the quality from the quantity. Think of it as a spring cleaning.
We all focus on the upside of projects, but it remains equally important to realize the downside. Find quality projects through analyzing tokenomics, whitepapers, teams, utility, and project philosophies. That way, if the bear market broom comes to sweep away the trash, you find your investments possess the fundamentals to survive.